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Leading polyester enterprises witness sharply falling performance on the year in Q1 2023

2023-05-23 08:33:09 CCFGroup

On the last working day before the May Day holiday, the Q1 report of polyester leading enterprises was finally fully disclosed. According to the year-on-year data of each enterprise, except for the small increase in net profit of Eastern Shenghong, the net profit of other enterprises fell sharply.

Main accounting data and financial indicators of Q1 (sorted by operating income)
Company name	Total operating income (Yuan)	Year-on-year growth	Quarter-on-quarter growth	Net profit attributable to the owner of the parent company (Yuan)	Year-on-year growth	Quarter-on-quarter growth	Operating cost (Yuan)	Year-on-year growth	Gross profit margin of sales	Year-on-year growth	Total assets
Rongsheng Petrochemical (002493)	69.721 billion	1.63%	8.98%	-1.468 billion	-147.11%	30.45%	66.685 billion	20.41%	4.35%	-77.43%	362.918 billion
Hengli Petrochemical (600346)	56.144 billion	5.15%	8.04%	1.020 billion	-75.85%	127.06%	50.945 billion	12.85%	9.26%	-40.10%	238.768 billion
Eastern Shenghong (000301)	29.534 billion	114.44%	72.57%	717 million	4.75%	169.69%	25.306 billion	109.42%	14.32%	16.80%	175.194 billion
Hengyi Petrochemical (000703)	28.381 billion	-14.65%	-1.23%	35 million	-95.24%	101.45%	27.176 billion	-13.43%	4.24%	-24.29%	107.233 billion
Tongkun (601233)	15.913 billion	22.47%	7.49%	-490 million	-132.61%	72.85%	15.152 billion	29.16%	4.79%	-50.72%	91.829 billion
Xinfengming (603225)	12.509 billion	17.99%	-2.61%	189 million	-33.47%	138.65%	11.831 billion	-8.31%	5.42%	-35.93%	47.291 billion

Eastern Shenghong is the only enterprise among the 6 enterprises with year-on-year and quarter-on-quarter growth in Q1 performance, which is related to the commissioning time of its refining and chemical projects. Since the end of 2022, Shenghong Refining and Chemical Project has been fully put into operation, and the operating rate has been gradually promoted. The large refining and chemical projects and new energy and new materials sector have provided assistance for the steady recovery of the performance in the first quarter; Rongsheng Petrochemical, Hengli Petrochemical and Hengyi Petrochemical, both "private refining and chemical giants", also improved significantly in the first quarter compared with the previous quarter, in which Hengli Petrochemical took the lead in recovering, and its net profit turned into a profit compared with the previous quarter. Private refining and chemical enterprises showed a strong signal of recovery.

Price spread or profit of polyester value chain and YOY and QOQ change
Product	PX-Naphtha spread	PTA-PX spread	Naphtha-based MEG	POY150/48	FDY150/96	DTY150/48	PSF processing spread	PET bottle chip processing spread	Semi-dull PET fiber chip cash flow
Q1 2022	209	397	-186	53	-121	378	1019	1629	33
Q4 2022	304	432	-227	-273	-38	141	1124	974	135
Q1 2023	347	353	-194	-60	103	123	914	1024	-8
YOY change	66%	-11%	-4%	-212%	185%	-67%	-10%	-37%	-124%
QOQ change	14%	-18%	15%	78%	370%	-12%	-19%	5%	-106%

As for polyester downstream sectors, the net profit of Hengyi Petrochemical and Xinfengming turned into profit in the first quarter of 2023. Although Tongkun's net profit was still under negative territory, but it has apparently improved over last quarter. After the domestic economic growth stabilized and rebounded, the demand for downstream clothing, home textiles, tourism and other areas gradually recovered, which stimulated the profit of PFY to recover in Q1 2023.

Inventory amount in the first quarter of 2023 (100 million Yuan) and changes
Company name	Current balance	Balance at beginning of year	Change	Change
Rongsheng Petrochemical	545.20	606.90	-61.70	-10.2%
Hengli Petrochemical	279.46	378.36	-98.90	-26.1%
Eastern Shenghong	191.40	175.33	16.07	9.2%
Hengyi Petrochemical	134.78	140.83	-6.05	-4.3%
Tongkun	86.23	73.86	12.37	16.7%
Xinfengming	53.43	37.19	16.24	43.7%

In terms of inventory amount, the larger the capacity of polyester products, the greater the inventory pressure remained. The inventory amount of Tongkun and Xinfengming increased significantly in the first quarter of 2023, while Hengyi achieved effective inventory control benefited from this year's sales policy.

Average price of polyester value chain and YOY and QOQ change
Product	Q1 2022	Q4 2022	Q1 2023	YOY change	QOQ change
WTI Futures	95.00	82.64	75.99	-20.0%	-8.1%
Brent Futures	97.80	88.63	82.10	-16.1%	-7.4%
Naphtha, CFR Japan	882	673	689	-21.9%	2.4%
PX, CFR China	1091	977	1035	-5.1%	5.9%
RMB PTA	5656	5649	5708	0.9%	1.0%
RMB MEG	5171	3961	4148	-19.8%	4.7%
SD PET fiber chip	6951	6642	6612	-4.9%	-0.4%
Water-grade bottle chip in East China	8197	7131	7294	-11.0%	2.3%
SD POY150D/48F	7871	7134	7460	-5.2%	4.6%
SD FDY150D/96F	8196	7869	8124	-0.9%	3.2%
DTY150D/48F non-intermingled	9449	8475	8784	-7.0%	3.6%
1.4D direct-spun PSF	7670	7361	7265	-5.3%	-1.3%

In the first quarter of 2023, with eased epidemic control and the recovery of residents' consumption willingness, the demand of upstream and downstream sectors of polyester was repaired quarter-on-quarter, and the operation status of the enterprise was significantly improved; In Q2, after domestic demand weakened but export demand failed to grow apparently, polyester downstream market was under pressure again. PFY plants saw greatly falling profit, which may affect the profit of enterprises in Q2. Polyester industrial chain may see strong upstream sector but weak downstream field.

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